TARP Firms' Pay Unchecked

WASHINGTON—The U.S. Treasury failed to rein in pay at companies that received federal bailout funds, a watchdog said Monday, in a report that highlights continued friction over the government's oversight of executive pay at companies such as General Motors Co. and Ally Financial Inc.

The Treasury in 2009 gained power to approve executive pay at firms that received major federal assistance during the financial crisis, following public outrage over big bonuses paid at American International Group Inc. after its financial...